In the Financial world this week, May 16

Financial information for the past week:

o Most major stock markets finished the week a little lower as investors are concerned that moves to control inflation will cause a slowdown in global economic growth
o There has not been a recover in commodities prices following last week’s significant fall as the dollar has strengthened
o The US and China have ended two days of negotiations with a series of deals on US access to the Chinese market and Chinese access to sensitive US technology

• In the US
o Initial jobless claims fell to 434,000 last week, still at a higher level than had been expected
o Retail sales rose by 0.5 percent in April following a 0.9 percent increase in March, though much of the increase was due to higher gasoline prices. It is the smallest increase for nine months
o The Thomson Reuters and University of Michigan Consumer Sentiment Index rose from 69.8 in April to 72.4 in May, a three-month high
o Import prices rose 2.2 percent in April compared to a 2.6 percent increase in March. It is the first time since June 2008 that import prices have increased by more than 2 percent in two consecutive months
o The Producer Price Index rose 0.8 percent in April following a 0.7 percent increase in March
o The Apple brand is now the most valuable brand in the world at US$ 153 billion. It has overtaken Google following the success of the iPad and iPhone
o Microsoft has agreed to buy Skype Technologies for US$ 8.5 billion to support its online and mobile advertising strategies. Skype has 170 million active users

• In the stock markets, the Dow Jones Industrial Index closed lower by 0.3 percent at 12,595; the Standard & Poor’s 500 Index closed down 0.2 percent at 1,337 and the NASDAQ closed just unchanged at 2,828

• In Europe –
o European stocks fell as a review of the economic support package for Greece raised new concern about sovereign debt crises and as Spain was hit by an earthquake
o The Dow Jones Euro Stoxx 600 Index finished just unchanged at 281
o The euro weakened another 1.4 percent to close at US$ 1.4118 even as reports of economic growth in some countries heightened expectations that the European Central Bank will raise interest rates soon
o In Germany, Gross Domestic Product grew by an annual 5.2 percent in Quarter 1, the biggest increase since German reunification twenty years ago
o Exports in March were 98 billion Euros, the highest level ever and 16 percent up on the same month in 2010
o The DAX closed lower by 1.2 percent at 7,403
o French Gross Domestic Product grew 1 percent in the first Quarter, more than had been expected
o The CAC closed at 4,019, down 1.0 percent
o The Bank of England has cut its economic growth forecast for this year to 2.7 percent, down from 2.9 percent and expects 2012 growth will be 2.8 percent instead of 3.2 percent
o However, there may be an interest rate increase soon as inflation moves towards an annual 5 percent
o The FTSE closed 0.8 percent lower at 5,926 and the Sterling pound weakened by 1.0 percent to US$ 1.6197
• In Asia –
o The MSCI Asia Pacific Index closed lower this week by 2.2 percent at 136
o China has raised Bank reserve requirements to a record 21 percent to control inflation which was at 5.3 percent in April compared to the target 4 percent
o It is the fifth increase this year and there are concerns that economic growth will slow from the 11.9 percent seen last year
o Hong Kong’s economy grew by an annual 7.2 percent in the first Quarter following a 6.4 percent growth in Quarter 4. There are concerns for accelerating inflation and the threat of a property bubble
o The Composite Shanghai Index closed at 3,128, up 0.3 percent while the Hang Seng was unchanged at 23,134
o The Japanese government has agreed to support Tokyo Electric Power in restarting thermal power plants to avoid possible power shortages during the demanding peak season
o The Nikkei finished the week at 9,648, down 2.1 percent and there are 80.80 yen to the dollar
o In India, inflation has fallen to 9 percent as food inflation is down to 7.7 percent, its lowest level for 18 months
o However, factory output growth slowed to an annual 7.3 percent in March, significantly lower than the 15.5 percent growth in March last year
o The Sensex closed higher by 1.8 percent at 18,634

• In Mexico –
o The President has said he is comfortable with the peso’s strength and inflation remains under control even as the economy grows faster than the government previously expected
o He says the 6.7 percent strengthening of the peso this year is a natural phenomenon stemming from near zero interest rates in the US
o He expects the economy will grow by 4.3 percent this year, more than a previous government estimate of 3.9 percent
o The International Monetary Fund expects Gross Domestic Product to expand by as much as 5 percent in 2011, following last year’s growth of 5.5 percent
o The President also said he hopes to modernise Pemex in a way similar Brazil’s Petrobras
o Gross Fixed Investment declined 0.3 percent in February from January as imports of machinery fell by 2.9 percent though investment in goods produced domestically rose 3.1 percent
o The Organisation of Economic Cooperation and Development says Mexico has the highest prices for basic broadband Internet connection and the slowest advertised download speeds of all its 34 member countries
• The Bolsa closed lower by 0.5 percent at 35,045 and the peso weakened by 0.8 percent to close at 11.73 to the US dollar
• In Latin America –
o Brazil will apply non tariff trade barriers on car imports in an effort to protect domestic manufacturers as the strength of the currency is putting pressure on government to protect local factories
o The barriers will affect car producers such as Mexico and the United States and particularly Argentina, which supplies half the vehicles imported into Brazil
o The Bovespa closed at 63,235 down 1.8 percent in the week
o In Argentina, the official inflation rate in April was 0.7 percent, down from 0.8 percent in March but analysts believe April’s true inflation to be between 1.5 percent and 2.5 percent
o The Merval closed at 3,378 up 1.9 percent
o Colombia’s Central Bank says inflation will be at 3.1 percent this year, less than its 3.3 percent previous forecast following three interest rate increases this year
o The BVC stock market closed at 41.20, up 2.0 percent
• In the commodities markets, prices globally have fallen approximately 10 percent from the start of last week and are at their lowest for four months –
o Crude oil closed higher by 1.6 percent at US$ 99.65 per barrel having trader as high as US$ 113 on Monday. The International Energy Agency has lowered its 2011 global oil demand growth forecast to 1.5 percent because of high oil prices and weaker Gross Domestic Product projections for advanced economies
o Gold recovered from last week’s fall to trade as high as US$ 1,509 per ounce on Tuesday but then fell back as low as US$ 1,479 before closing lower in the week by 0.1 percent at US$ 1,494 per ounce
o Silver closed at US$ 35.01 per ounce, down another 1.8 percent in the week though it did trade at US$ 37.94 on Wednesday
o Copper prices rose this week by 0.3 percent to close at US$ 3.99 per pound, close to a 16 week low
o Corn is down 0.6 percent at US$ 6.82 per bushel
o Coffee futures are again down by 6.5 percent at US$ 2.69 per pound
o Sugar prices finished the week at 21.45 cents per pound, up 4.8 percent
o Cocoa closed at US$ 3,002 per tonne, down 2.6

Information provided to Coldwell Banker Riveras and Coldwell Banker Mexico by deVere Partners & Investments

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